A bill to amend the Natural Gas Policy Act of 1978 to limit the use of "take or pay" clauses and to impose a prudence test.

Amends the Natural Gas Policy Act of 1978 to provide that the provisions of any gas sales or purchase contract applicable to the first sale of natural gas which have the effect of requiring the purchaser to make a payment to the seller if gas volumes tendered by the seller under the contract are not taken by the purchaser shall be suspended and of no effect. Provides, however, that if the seller and buyer apply to the Commission, the Commission may permit such agreements if it finds: (1) that such agreements were made before November 29, 1982; (2) that, if the purchaser is a natural gas company, such contractual agreements will not cause unreasonable rates; and (3) that permitting such contractual arrangements is necessary to prevent a default by seller on a loan or debt in effect on November 29, 1982, or permitting such contractual arrangements is necessary to prevent a taking, without fair compensation, of seller's property.

Prohibits cost passthroughs by an interstate pipeline for imprudent actions on the part of the pipeline.